Specialty Pharmacy Times

Medical Benefit Specialty Drug Management–A Call to Action

Kirby J. Eng, RPh | February 14, 2017

Specialty drug utilization and cost management have dominated managed care conferences and journals over the last few years, showing no sign of abating.

Typically, much of the focus in specialty drug trend management is on oral and self-administered drug formulations traditionally administered through a payer’s or plan sponsor’s pharmacy benefit. Unfortunately, this overlooks approximately 36% to 50%1,2 of specialty drug spend that is occurring under a payer or plan sponsor medical benefit, rather than pharmacy benefit. Drugs administered through the medical benefit are mostly injectable or intravenous formulations, and are typically administered in physician offices or clinics under the supervision of a trained certified professional (nurse, physician).

Medical benefit specialty drugs treat a wide range of diseases or conditions; however, specialty drugs used for cancer, anemia, neutropenia, rheumatoid arthritis, Crohn’s disease, age-related macular degeneration, and psoriasis make up much of the medical benefit specialty drug spend. An observation from a recently released white paper3 highlights plan sponsor concerns on management gaps for specialty drugs administered through the medical benefit.

“One of the biggest challenges is identifying what costs are running through the medical benefit versus the pharmacy benefit. With a high percentage of costs occurring through medical, as well as a variety of payment dispensing options, it can be difficult to achieve full transparency on overall spending and utilization.”

—Cheryl Larson, President Midwest Business Group on Health

A major hindrance for transparent, medical benefit specialty utilization and spend data is the use of less descriptive health care common procedure coding system (HCPCS) through a traditional CMS 1500 claims billing format. Other complexities for effectively managing medical benefit specialty drug spend include cost differences by site of service, provider reliance on dispensing drug revenues, and variable fee schedules.

It is, perhaps, not surprising that medical benefit specialty drug spend plan sponsors are frustrated about their inability to adequately recognize whether covered employees and dependents are receiving the most clinically appropriate and cost-effective drug therapies.